Amadeusz Juskowiak

Purolator pcc in buyout with hutton efh

New Jerseybased overnight messenger Purolator Courier Corp said it has agreed to be acquired for about 265 mln dlrs by a company formed by EF Hutton LBO Inc and certain managers of Purolators US courier business

Analysts have said that Purolator has been for sale for some time Purolator announced earlier it was mulling a takeover bid but analysts wrongly predicted the offer was from another courier company

Hutton LBO a wholly owned subsidiary of EF Hutton Group Inc will be majority owner of the company

Hutton said the acquiring company PC Acquisition Inc is paying 35 dlrs cash per share for 83 pct of Purolators stock in a tender offer to begin Thursday The rest of the shares will be purchased for securities and warrants to buy stock in a subsidiary of PC Acquisition containing Purolators US courier operations

If all the shares of Purolator are tendered shareholders would receive for each share 29 dlrs cash six dlrs in debentures and a warrant to buy shares in a subsidiary of PC Acquisition containing the US courier operations

Hutton said in the merger shareholders would get 46 mln dlrs aggregate amount of guaranteed debentures due 2002 of PC Acquisition and warrants to buy 15 pct of the common stock of the PC courier subsidiary Hutton said the company has valued the warrants at two to three dlrs per share

Purolators stock price closed at 35125 dlrs on Friday While some analysts estimated the company was worth in the mid 30s at least one said it would be worth 38 to 42 dlrs

This follows sales of two other Purolator units It agreed recently to sell its Canadian Courier unit to Onex Capital for 170 mln dlrs and previously sold its auto filters business

Purolator retains its Stant division which makes closure caps for radiators and gas tanks A Hutton spokesman said the firm is reviewing its options on Stant

Purolators courier business has been lagging that of its US rivals because of the high price it paid in the past several years to add air delivery to its ground fleet

EF Hutton will provide 279 mln dlrs of its funds to complete the transaction This socalled bridge financing will be replaced later with longterm debt most likely in the form of bank loans Hutton said Hutton LBO is committed to keeping the courier business its president Warren Idsal said

Purolator lost 120 mln dlrs over the last two years largely due to US courier operations which we believe the management is turning around We belive it will be a very serious competitor in the future said Idsal

William Taggart chief executive officer of US Courier division will be chief executive officer of the new company

The tender offer will be conditioned on a minimum of two thirds of the common stock being tendered and not withdrawn to the expiration of the offer as well as certain other conditions

The offer will begin Thursday subject to clearances from the staff of the Interstate Commerce Commission and will expire 20 business days after commencement unless extended